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Volume #18 | IssueNo. 324/2026 | May 2026

Learning that comes alive !

We are living in an era of information overload, fleeting attention span and FOMO. This is true across generations and geographies. Catching audience attention as a public speaker is a huge challenge and the only way to overcome it is to get creative and find ways of engaging with the audience. Let me share my (my team’s) experiments over the last few months.

  • CLDP: When I was asked to deliver a session on corporate governance and board dynamics for young graduating Company Secretaries as part of their ultimate training module (Corporate Leadership Development Programme), I decided no more boring presentations that would put them all to sleep. They would have received enough and more theory about the topic, filled up answer sheets, presented project reports and followed media stories. What they need is experiential learning. To make this possible, my colleague and I came up with 4-5 fictitious cases that required board deliberations and role play as Chairperson, Independent Directors, promoters, proxy advisors, CFO, CS, Legal Head, Internal Auditor, Environmental expert etc. This made sure every member of the class got a chance to prepare, speak and perform a role. Suddenly,  the whole class came alive as they watched each other sink into the elevated roles and sat in the board room discussing serious business issues. Icing on the cake was when they keenly observed and shared their feedback for each other. This made sure everyone listened carefully, there was no crosstalk or dozing off and focussed communication. After every mock board meeting, I evaluated and gave my critical feedback on both the law as well as the communication style for each role that included the verbal and non-verbal aspects, presentation style, team dynamics, decision making methodologies, what type of a board the role play indicated – professional, promoter driven, disruptive, collaborative etc. It was fun based learning that gave me also an assurance that the future of corporate governance is safe in the young, smart hands. 
  • SSE: In another instance, I was asked to speak to a group of NGOs about registration on the Social Stock Exchange (SSE) which is a relatively new concept. While the regulators spoke about their expectations and the law around SSE, I chose to speak from the NGOs perspective – the challenges they could face, the readiness in governance, data and organisation structure expected, practical insights, professional help that adds value etc. Instead of relying merely on a presentation, I called one of my clients who is the founder of a Foundation and a good communicator on to the stage to share his experience in going through the entire registration process. It became a fireside chat model where we discussed the law, procedure, practical difficulties, nuances and how to level up to gain public credibility as a compliant NGO. Must say experiment worked pretty well with participants staying engaged even after the session. Regulators also became aware of the challenges on the other side. 
  • MFK: Recently our firm was approached by Mentors for Kids Foundation (https://upskill.mentorsforkids.in/courses) to host a few MBA students under their “Setu : Upskilling students from rural Karnataka” initiative. The ask was to familiarise them with corporate legal and compliances and how practice firms function. The moment I presented the proposition to my team, they lapped it up with full enthusiasm, broke up into teams and took responsibility for 5 different topics spanning company incorporation, fund raise, intellectual property rights, CSR and contract analysis. My mandate was – it should be creative and engaging. Must say the team excelled expectations. The visiting students-team from Udupi were fully engaged all through – by way of riddles, quizzes, contract clause Q & As, visualisation of dream companies, gamified flash cards, ‘Pick One’ trivia rounds, pictorial illustrations etc. It was a truly fun-based immersive learning experience that both the students as well as my team enjoyed. 
  • Corporate Laws Amendment Bill, 2026 : In legal circles, this is the talk of the town since it is an extensively transformative change proposed in the functioning of LLPs and Companies. There are seminars, workshops, conferences, round tables, representation aplenty. Here again the challenge for our team was how to make learning interesting, creative and enjoyable. Again, every single one of them put their best foot (should I say tongue😊?) forward and came up with unique models. Some of them turned into demanding clients seeking advice, while others became busy consultants offering explanations. Yet others turned into news anchors interviewing a few more as subject matter experts. This model had hilarious product ads enacted as well during break time! One team had an exasperated CS trainee travel through a time machine comparing the changes over a block of years and lamenting on the MCA performance glitches. Over 5-6 sessions, the entire Amendment Bill was explained through role plays and well scripted performances. Again the bottom line was Fun based Learning ! 

Likewise we have endeavored to make Samhita as creative as possible and have been receiving positive feedback from the readers. This 324th  issue spans updates from MCA, Ministry of Labour, RBI, IBBI, SEBI and GST. 

For access to previous issues of Samhita and readers’ feedback, please visit:
👉 http://www.sharadasc.com/resource-center/

Happy Reading
S.C. Sharada

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MCA permits CSR Deployment through ZCZP Instruments Listed on SSE

The MCA vide notification dated May 27, 2026 has notified the Companies (Corporate Social Responsibility Policy) Amendment Rules, 2026, effective immediately. The amendment introduces the concept of Zero Coupon Zero Principal Instruments (ZCZP Instruments) issued by Not-for-Profit Organisations (NPOs) registered on the Social Stock Exchange (SSE) as an eligible CSR activity. Key highlights are as follows:

  • Companies may undertake CSR activities through subscription to ZCZP Instruments.
  • CSR expenditure through such instruments is capped at 10% of the company’s total CSR obligation for the relevant financial year.
  • Companies investing in ZCZP Instruments are exempt from conducting impact assessments for projects funded through such instruments.
  • NPOs issuing ZCZP Instruments must utilise the funds for projects with a duration not exceeding 3 succeeding financial years from the date of issue.
  • Any unspent amount remaining upon termination of listing of the instrument must be transferred to a Schedule VII fund, with compliance reporting to SEBI.
  • The provisions of Rule 4 of (CSR Policy) Rules, 2014 shall be applicable for the implementation of CSR through a ZCZP instrument except sub-rule (5) & (6).
  • Schedule VII of the Companies Act, 2013 has also been amended to expressly recognize subscription to ZCZP Instruments on the Social Stock Exchange as an eligible CSR activity.

The amendment is aimed at facilitating innovative CSR funding mechanisms and strengthening the role of SSEs in channelling resources towards social impact projects.

(Open MCA notification for Amended Rules dt May 27, 2026)
(Open MCA notification for Schedule VII Amendment dt May 27, 2026)

Regulatory Updates

MCA Update

Advisory to use SH-4 for transfer of interest of members

MCA vide advisory released on May 11, 2026 has clarified that companies without share capital must follow the prescribed process for transfer of interest of a member. A proper instrument of transfer must be executed by both the transferor and transferee and submitted to the company. Even though there is no share capital, the law requires the use of Form SH-4 for such transfers. This is specifically clarified under Rule 11(2) of the Companies (Share Capital and Debentures) Rules, 2014, where the reference to securities shall be read as “interest of the member of the company”.

(Open MCA Clarification dt May 11, 2026)

Labour Law

Central Labour Law Rules notified

In furtherance to the notifications on the four Labour Codes in November 2025, namely the Code on Wages, 2019, the Industrial Relations Code, 2020, the Code on Social Security, 2020 and the Occupational Safety, Health and Working Conditions Code, 2020, the Ministry of Labour and Employment has notified the corresponding Rules in May 2026 to operationalise the new labour law regime. 

The Central Labour Law rules provide for a compliance-oriented system aligned with modern employment practices addressing aspects such as mandatory issuance of appointment letters, social security benefits to gig and platform workers, enabling women to work across sectors including night shifts, establishment of the National Occupational Safety and Health Advisory Board, promotion of digital compliance through electronic filings and portal-based governance. Highlights of each of the Rules may be referred from the link below.

(Open Highlights of the Labour Law Rules)
(Open Central Labour Law Rules)

RBI Update

Foreign Exchange Management (Authorised Persons) Regulations, 2026

As per Section 10 of the FEMA, 1999 an Authorised Person (AP) is a person authorized by RBI to deal in foreign exchange or in foreign securities, as an authorised dealer, money changer or off-shore banking unit or in any other manner as it deems fit. Vide notification dated April 30, 2026, RBI has notified a separate Regulation for governing the eligibility, activities and functioning of Authorised Persons. Highlights of the Regulations are as follows:

  • Any person seeking to operate as an Authorised Person shall apply to the RBI through PRAVAAH portal to the Regional Office concerned. An authorisation granted to a bank or an NBFC shall be coterminus with its Banking Licence or Certificate of Registration respectively.
  • Existing Authorised Persons can continue till the expiry of its existing authorization. An application for renewal shall be made at least 2 months before expiry of the existing authorisation. In such a case, the existing authorisation shall continue till renewal is granted under the regulations or the application is rejected, as the case may be.
  • APs are classified under different categories as follows:

AD Category-I

A bank licensed by the Reserve Bank.

AD Category-II

i. A bank licensed by or a Non-Banking Financial Company (NBFC) registered with the Reserve Bank.
ii. A Full-Fledged Money Changer (FFMC) or a Forex Correspondent functioning for at least two years with an average annual forex turnover of ₹50 crore during the previous two financial years

AD Category-III               

An entity:
i. required to deal in foreign exchange incidental to the activities undertaken by it;
or
ii. that intends to offer innovative products and services that may involve dealing in foreign exchange.

  • Applications for fresh FFMC licences will not be considered by RBI. Only those already under process as on date will be considered. A timeline of 30 days has been given to submit additional documents sought, failing which the application will be rejected.
  • Minimum positive net worth as per last audited balance sheet, certified by Statutory Auditors shall be ₹10 crores and ₹2 crores for AD Category-II and AD Category-III authorized persons respectively. The same shall be ensured on an ongoing basis.
  • The promoters, directors and KMPs shall satisfy fit and proper criteria as prescribed. The same shall be ensured on an ongoing basis.
  • Authorisations granted will be subject to conditions as may be imposed by RBI. Further, RBI has the right to vary or revoke any of the existing conditions of authorisation or impose new conditions.
  • A Forex Correspondent Scheme has been established for permitting an Authorised Dealer Category-I or an Authorised Dealer Category-II to appoint agents for conducting money changing business under a ‘principal-agent’ model subject to conditions prescribed in the Regulations.
  • No fresh franchisee arrangements shall be entered into by APs. Those franchisees valid as on date shall be discontinued within two years. 

(Open RBI notification dt April 30, 2026)

Others

DPIIT notifies SOP for processing FDI proposals

FDI beyond certain permissible limits, in certain sectors or from certain countries requires Government approval. To facilitate the same, the Department for Promotion of Industry & Internal Trade (DPIIT) has released Standard Operating Procedure (SOP) on May 04, 2026. Highlights of the same are as follows:

  • Applications shall be filed through the Foreign Investment Facilitation (FIF)/NSWS Portal where the Administrative Ministries/ Departments concerned will continue to examine the FDI proposals. 
  • Enhanced documentation requirements in the application as well as enhanced scrutiny for investments from Land Border Countries. 
  • Paperless filing with no physical copies required. The application with prescribed requirements such as summary of the FDI proposal, shareholding pattern of the Investee, Beneficial ownership details from countries sharing a land border with India, Investor documents etc. shall be submitted along with Security Clearance Form. 
  • DPIIT will identify and forward the proposal to concerned Ministry/Department and also to RBI for comments. Those requiring Security clearance will be forwarded to MHA. All proposals shall be forwarded to MEA. 
  • Comments, if any from RBI, MHA and MEA shall be provided on the Portal with access to concerned Ministries/Departments and DPIIT. If no comments are received within prescribed time, it shall be presumed there are no comments to offer.
  • Emphasis on expeditious disposal of FDI proposals without the need to replicate an Inter Ministerial body in the respective Ministries/Departments. 12-week overall timeline for processing excluding time taken by applicants to respond to clarifications. 
  • Where the Competent Authority proposes to reject the proposals or in cases where additional conditions for approval are stipulated, concurrence of DPIIT shall be obtained except where the conditions pertain to compounding under FEMA or compliance with applicable laws/regulations or court orders. 
  • The SOP also prescribes formats for application, approval, guidance on timelines for closure of the application including clarifications, withdrawal and surrender of the approval received by the applicant etc.

(Open DPIIT SOP dt May 04, 2026)

SEBI Updates

NSE Mandates XBRL Filing for Insider Trading Disclosures

Regulation 7(2) and Regulation 7(3) of the SEBI (Prohibition of Insider Trading) Regulations, 2015 deal with continual disclosures of trades by promoters, members of the promoter group, designated persons and directors of a listed company and the corresponding obligation of the company to report such disclosures to the stock exchanges.  

NSE vide circular dated May 4, 2026, has mandated with immediate effect, that such disclosures shall be filed in XBRL format by the listed companies. This is introduced to ensure uniformity and standardization in filing of disclosures with the Exchange. 

(Open NSE Circular dt May 04, 2026)

Enhanced Reporting for Violations of Code of Conduct

NSE vide circular dated May 04, 2026 has notified XBRL-based reporting for violations of the Code of Conduct under SEBI (Prohibition of Insider Trading) Regulations, 2015 requiring listed entities, intermediaries and fiduciaries to report such breaches in a structured electronic format through the NEAPS system with effect from May 05, 2026. To enhance accuracy and consistency in compliance reporting, such filings shall be made in XBRL mode. Submissions through PDF or any other mode will be treated as invalid.   

(Open NSE Circular dt May 04, 2026)

IBBI Updates

Guideline for Panel of IPs

IBBI vide guidelines issued on May 18, 2026, enlists the procedure for preparing a panel of Insolvency Professionals (IPs) effective from July 01, 2026 to December 31, 2026 to minimize administrative delays in appointment of the IP. These guidelines replace the earlier one issued on November 21, 2025. The guidelines cover the following key aspects:

  1. Eligibility of IPs to be included in the panel
  2. Expression of Interest to be submitted by eligible and willing IPs 
  3. Preparation of Panel list – Zone-wise and Bench-wise
  4. Sorting criteria
  5. Conditions applicable on IPs 

Expression of interest is required to be submitted by June 19, 2026 as per the format provided in Form A of the guidelines. 

(Open IBBI guidelines dt May 18, 2026)

Amendments to Valuation Framework under Liquidation Process

IBBI vide notification dated May 19, 2026 has amended Regulation 35 of Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016 which provides for valuation of assets or business intended to be sold. 

A new proviso has been inserted after Regulation 35(2) to state that where a corporate debtor is classified as Micro, Small or Medium Enterprise under the MSME Development Act, 2006, the liquidator shall appoint one Registered Valuer for each asset class of the corporate debtor. However, the liquidator may, after consultation with the consultation committee and for reasons recorded in writing, appoint two Registered Valuers.

The notification streamlines MSME liquidation by making valuation leaner and faster, while retaining safeguards through controlled discretion.

(Open IBBI notification dt May 19, 2026)

Amendments to Valuation Framework under CIRP

IBBI Vide notification dated May 19, 2026 has amended the Regulation 27 of Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 which deals with the appointment of registered valuers.

Pursuant to the amendment, a new proviso has been inserted after regulation 27(1) to provide that, where a corporate debtor is classified as Micro Small or Medium Enterprise (MSME) under the MSME Development Act, 2006, the resolution professional shall appoint one set of registered valuers fair value and liquidation value of the corporate debtor. However, the committee may, for reasons to be recorded in writing, direct appointment of two sets of registered valuers.

This proviso has been introduced with the aim of reducing compliance costs and burden on corporate debtors classified as MSMEs, while providing discretion to the Committee of Creditors to appoint two sets of valuers, wherever required.

(Open IBBI notification dt May 19, 2026)

Amendments to Valuation Framework under Pre-Packaged Insolvency Resolution Process

IBBI vide notification dated May 19, 2026 has amended the valuation framework under the Insolvency and Bankruptcy Board of India (Pre-Packaged Insolvency Resolution Process) Regulation 2021. Key amendments are as follows:

Regulation 38- Appointment of Registered Valuers: The resolution professional shall within 3 days of appointment, appoint one set of registered valuers to determine the fair value and the liquidation value of the corporate debtor. However, the committee, for reasons to be recorded in writing, may direct appointment of two sets of registered valuers.

The provisions relating to disqualifications for valuers have been expanded including restrictions relating to related parties, recent auditors (within preceding five years), associates of the RP or insolvency professional entity, and relatives of such person.

Regulation 39 – Fair value and liquidation value:  Regulation 39(1)(e) has been amended to state that the fair value submitted by the coordinating valuer shall be treated as the fair value of the corporate debtor. 

Provided that where two sets of registered valuers are appointed under Regulation 38, the fair value shall be taken as the average of the fair value estimates submitted by the coordinating valuers of each set.

Regulation 39(1)(f) has been amended to provide that the liquidation value of the corporate debtor shall be determined on an asset-class basis, using estimates provided by the registered valuer for each asset class.

Provided where two sets of registered valuers are appointed, the liquidation value shall be the average of the estimates submitted by two sets of registered valuers for each asset class.

(Open IBBI notification dt May 19, 2026)

ESG Updates

India meets Renewable Goals early, Targets 500 GW Clean Energy By 2030

India has achieved significant progress in renewable energy, meeting earlier targets well ahead of schedule. The country has already reached around 260 GW of renewable capacity, demonstrating strong policy execution and rapid expansion, especially in solar energy. This progress has positioned India as one of the leading performers among G20 nations in fulfilling commitments under the Paris Agreement and strengthened its role in global climate negotiations. The government attributes this success to consistent policy direction and ambitious scaling of targets, such as increasing solar capacity goals from 20 GW to 100 GW and delivering them on time.

Building on this momentum, India now aims to achieve 500 GW of clean energy capacity by 2030, linking its climate goals with economic growth and global trade expansion. The country is engaging with multiple international partners, reflecting how renewable energy is becoming central to both its environmental strategy and economic diplomacy. 

(Open ESG news update)

ICVCM approves GCC Standard and sets tougher conditions for Carbon Credit Integrity

The Integrity Council for the Voluntary Carbon Market (ICVCM) has approved the Global Carbon Council (GCC) Standard as CCP-Eligible under its Core Carbon Principles (CCP) framework, marking a significant step toward strengthening integrity in global voluntary carbon markets. The decision enables eligible GCC methodologies to seek CCP-labelled status, while ICVCM also granted conditional approvals to Verra’s renewable energy and coal mine methane methodologies, alongside approval of Isometric’s Mangrove Restoration Protocol. 

The latest decisions reflect ICVCM’s ongoing effort to establish high-integrity benchmarks for carbon credits and restore confidence in the voluntary carbon market amid growing concerns around greenwashing and over-crediting. GCC’s approval is particularly notable as it becomes one of the first Global South-based carbon crediting programs to achieve CCP-Eligible recognition, reinforcing its governance and transparency standards. 

(Open ESG news update)

GST Updates

Advisory on Refund Applications

GSTN vide advisory dated May 18, 2026 has introduced a standardized Annexure-B Offline Utility (Excel format) for refund applications involving accumulated Input Tax Credit (ITC). Key features of the same are as follows:

  1. Taxpayers can no longer upload Annexure-B in PDF format. 
  2. The new utility is now mandatory for the following refund categories:
    (i) Exports of Goods/Services without payment of tax (excluding electricity),
    (ii) Supplies to SEZ Unit/SEZ Developer without payment of tax,
    (iii) Refund due to Inverted Tax Structure, and
    (iv) Export of Electricity without payment of tax.

The utility requires HSN/SAC-wise invoice details (with proportionate split for multi-category invoices), correct reporting of ITC reversals, and generates a JSON file for upload on the RFD-01 screen. 

(Open GSTN Advisory dt May 18, 2026)

Enhancements in the e-Way Bill (EWB) Portal

The GSTN vide advisory dated May 21, 2026 has introduced certain functional enhancements to the e-Way Bill (EWB) Portal. The two key changes are as follows:
(a) mandatory capture of “Ship-To GSTIN” in all Bill-To/Ship-To transactions , and 
(b) voluntary E-Way Bill Closure functionality, allowing suppliers, recipients, transporters, drivers, or authorised persons to close e-Way Bills upon completion of goods delivery (on the same day or the immediately succeeding day) 

These enhancements are scheduled to go live by 15th June 2026.

(Open GSTN Advisory dt May 21, 2026)

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Quote of the day

Tell me and I forget, teach me and I may remember, involve me and I learn. — Benjamin Franklin

Disclaimer: The contents of this Newsletter are only a summary and has not dealt with any issue in detail. Any action taken or proposed to be taken must be in consultation with professionals and not merely based on the articles / news updates. S. C. Sharada & Associates disclaims all liability on action taken without professional advice.

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